Brits at their Best

“. . .the evidence is piling up that neither government nor multilateral spending on education and infrastructure are key to development. To move out of poverty, countries instead need fast growth; and to get that they need to unleash the animal spirits of entrepreneurs,” reports Mary Anastasia O’Grady in today’s WSJ.

“Empirical support for this view is presented again this year in The Heritage Foundation/The Wall Street Journal Index of Economic Freedom, released today. In its 14th edition, the annual survey grades countries on a combination of factors including property rights protection, tax rates, government intervention in the economy, monetary, fiscal and trade policy, and business freedom.
. . .The Index also reports that the freest 20% of the world's economies have twice the per capita income of those in the second quintile and five times that of the least-free 20%. In other words, freedom and prosperity are highly correlated.”

In the Heritage Foundation/WSJ Index the top ten countries are -

1 Hong Kong
2 Singapore
3 Ireland
4 Australia
5 United States
6 New Zealand
7 Canada
8 Chile
9 Switzerland
10 United Kingdom

O’Grady notes that “Former British colonies in Asia took three of the top five places this year", and explores the links between economic freedom and prosperity.

We note that economic freedom has to include accountability. A story on the front page of the WSJ today reports that toxic factories in China, 126 on the Index, are poisoning workers. This problem is not confined to China. To protect workers from harm the law should hold factory owners financially and criminally responsible.

Read more about the economic freedom and prosperity of the United Kingdom - the good and the bad.

The good news -

"The U.K. scores extraordinarily well in investment freedom, trade freedom, financial freedom, property rights, business freedom, and freedom from corruption. The average tariff rate is low, despite distortionary EU agricultural tariffs, and business regulation is efficient. Almost all commercial operations are simple and transparent, and support for private enterprise is a world model. Inflation is fairly low, and the business climate attracts foreign investment. The financial sector is a world hub. The judiciary is independent and highly trained. Corruption is almost nonexistent, and the labor market is notably flexible."
The bad news -

"The U.K. scores far below the world average in government size and fiscal freedom. Total government spending equals more than two-fifths of GDP, and tax revenue and rates are very high. "

The United Kingdom’s economic freedom and prosperity index slipped half a point, a fact that will adversely affect every British citizen.

2008 Heritage Foundation/WSJ Index of Economic Freedom & Prosperity – top 10 countries